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  FOX News    FOX News Sunday With Chris Wallace    News/Business. An analysis of top  
   newsmakers and events. (CC) (Stereo)  

    July 31, 2011
    6:00 - 7:00pm EDT  

the debt ceiling crisis . calling for one trillion in federal spend two trillion cut by deadline in thanksgiving. but no vote tonight on capitol hill. that's it for us. a special report starts right now in bret bauer. >> deal or no deal? >> the motion is not agreed tompt >> rumors of a compromise fuel the headlines. >> we are close. we are not there yet. >> with an august 2nd deadline looming, there is no shortage of blame . >> we cannot be leaders of the free world and sit on the sideline. >> haven't we tried it. where are the jobs. >> if you don't stop the spending and get it under control. you will face a serious problem. >> when we allow the uncertainty created by whether
our country is going into default, that is a self inflicted wound. >> latest developments and up-to-the minute reports. tonight's sunday edition of special reports starts right now. >> good evening, i am bret bauer. we have a little more than a day when the trashy said it reached the borrowing limit. the basics a debt ceiling extension in exchange for spending cuts and totaling 2.4 trillion . no tax increases and balanced budget amendment. but there is no deal yet. we have team coverage and henry watching the coverage in the white house. we start with mike emanuel on where we are at this minute. >> a short time ago senator reid reed --or reed signed off
. they if reid if there was a deal. >> you expect it today? >> i hope so. >> it is a long and tense weekend here on capitol hill . there are a number of issues that yet to be resolved. >> the tide turned on saturday after mitch mcconnel and boehner spoke by phone. mcconnel said he was close to recommend a deal to fellow republicans. >> now, i think the potential agreement that you just outlined is in our reach. we would avoid default and avoid raising the taxes and begin to the get the federal government's house in order. >> it included three trillion over three years and a debt ceiling increase to get to
early 2013 . spending cuts up front and a special committee to recommend cuts was 1.4 to match the debt ceiling increase. the committee must make recommendations before the recess. if congress doesn't approve the cuts, cuts go across the board including medicare . leading democrats insist they are still evolved. >> we have to keep work but i do feel better today about the ability to avoid default than i felt yesterday. >> one house republican whip was asked if he could get the tea party deal . the gop got much of what it wanted. >> and he wanted a debt ceiling with no cuts whatsoever . then he wanted more tril tril stimulus - stimulus. >> and lindsay offered this
conclusion. >> and i think we need to declare -- and a senate republican. that could be the problem. i understand that speaker boehner's one outstanding thing is the cuts. hawkish fiduciaries on capitol hill independents joe leiberman have concern about cutting defense in a time our military is fighting two wars in afghanistan and iraq . they feel like the military is stretched. the house armed services committee said yesterday he was worried about breaking the armed forces and that is a
grave concern for the republicans. >> of course, the speaker is counting heads. much more on this . ed henry is watching the goings on there for signs of progress . any proposed deal will have detractors. >> we heard about speaker john boehner and the problems with the tea party. the president may have trouble as well >> democrat leaderships huddled with nancy pelosi on capitol hill. top advisors found themselves on the fence. >> you are progressive. there is a powerful case for debt reduction. things like college loans and medical research and road construction. if we don't reduce the deficit, we'll not have room to do that. >> but a key liberal congressman is not beeing it. he released a blistering
statement charging that the deal trades people's livelihood for unappeasable right-wing radicals and i will not support it. the arizona democrat said the party is at a cross road and this is a cure as bad as the disease. i reject it and the american people reject it and the only thing left to do is repair the damage as soon as possible. any deal will create a special committee in congress to wave more spending cuts and tax changes potentially sweetening the pot for democrats. >> there is tougher issues of title reform and tax reform. this is not a republican playing field. >> liberals are suspicious of the fact that key republicans are doing a victory lap. >> the president insisted on a clean debt ceiling extension. we'll have a significant
amount of spending reductions in this proposal . the second thing was. he insisted on revenues and tax increases. there will not be tax increases in this proposal. early tomorrow, the progressive caucus is going to join forces and have a new's conference demanding that they deal with the debt ceiling issue on its own . white house aids are trying to shut the door on that entire option. but the progressive caucus and black caucus is not happy with this president and combine that with trouble on the right. you mention about defense cuts, this could blow up the entire deal. >> talk about how a potential deal affect the markets here and over seas. >> i am pleased to be joined by neal cavuto . managing editor of neal cavuto. >> so far, the futures and not
a guaranteed market finish . the dow futures are up 153 points and nasdaq is 30 and the dollar is trading up on rumors of a deal . so far, so good. >> and so if this holds, it could be a good day tomorrow in the markets . i am always leery of jumping to conclusions . you and i talked about the 08, it looked like the tarp deal fell off and the biggest point decline in history . you know, congress quickly got back together and approved tarp . the markets will stave off more sell outs and two months later, they were down thousands of points. we are focusing on the moment and the moment there is a deal or no deal. if it is a bad deal then keep in mind temperature is not for
the rating's agencies liking. they would be looking for four trillion . it could be a case of buy are's remorse. we got the gdp numbers on friday are employing percent . that was shocking enough. you look back at the previous quarters and the revisions and point four. the private sector forecasters are saying that the growth in the second half are three percent and above and uncertainty tied to the debt ceiling debate is having an affect on the economy. you buy that line on the administration. long before the debt ceiling debate. we are concerned and laying off 13,000 workers or research
in motion and 2000 workers and a few hours ago. announcing 10,000 lay offs. none of this has to do with the debt situation but has to do with concerns that things are slowing down. we have factory orders that are cascading. we have a genuine fear that we are stepping in a potential recession. at the very least a slow down . you pick your good news where you can fibed - find it. near term it looks clear . we have far bigger hurdles down the road. we spent the last five-days in this fine city. it is a little hot and a lot of lawmakers. and it would be great air conditioning here. what is your perspective. you are up here many times and your particular back and forth. you are usually in new york.
what do you think about this? >> you are better schooled in this soap opera than i am. how often do you push yourself to the brink. budget negotiations . i don't know about you. you do it last minute you do a half ass job . i am concerned in the end, what we cobble together is's lousy deal. three trillion. i don't begrudge the cutting. the details are later. but i suspect that most of the them, i don't know about you bret. but i don't know what i am going to have for breakfast or do 10 years from now. the cuts in the outer years, you get a potential case was buyer's remorse. we have been there and done that. >> neal, thank you for stopping by.
>> sure. >> cucatch him tonight 9:00 on the fox business network. if you don't have fox news network. ask for it. >> and tell us about one place for uncle sam to go for cash . republican officials are not waiting around for the feds to default. in america today. automotiveerformance is gone. and all we have left are fallen leaves and broken dreams. oh. wait a second. that is a dodge durango. looks like american performance is doing just fine. ♪ carry on. ♪ is besabsorbed in small continuous amounts. only one calcium supplement does that in one daily dose. new citracal slow release...
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purina cat chow helps you well-being. we're all striving for it. nurture it in your cat with a full family of excellent nutrition and helpful resources. purina cat chow. share a better life. but just in case federal funds stop flowing to the state, california upon . of billion dollars to cover the health care programs and transportation and other services. >> it means that the state
obligations are paid. >> the state treasurer said failure to raise the federal debt ceiling could throw credit markets in turmoil and he didn't want to risk paying more in interest. the economist said securing the loan now was a smart move . >> all you can do is act on the information you have at one time. the future is uncertain with the federal government resolution . he was wise to do it. >> the state got a low rate from wells fargo and citigroup and other financial institutions . >> if we pay it back in november or sooner, it is a few million in interest for 5.4 billion is a good deal. >> it is ironic when california hammers out a solid on time budget for the first time in years, the state faces potential harm because of grid lock in washington.
>> californians are not used to looking fiscally responsible. we should be enjoying the contrast, but we want to see it get solved. it is nice knowing that the state treasurer to keep the state going in case the federal government can't pay its bills next week. >> states like portland, oregon are taking precautionsine as they watch for a resolution in washington. this is fox news. >> look at the politics behind the debt ceiling deal. who are the winners and losers? fox news politics editor, chris, welcome? >> we heard criticism for the tea party. senator mccain reading that editorial on the senate floor and calling tea party members hobits. they were asking for too much. but you say the tea party
could be a big winner here in -- >> there is bright lights that shown through. there is a case of hobitry. but there are people who are interested in governing and can get it done. one is ran paul in the senate. he and mitch mcconnel have been bad cop and battered cop pummeling hare reid making it clear they are not unreasonable. that created pressure for harry reid . in the house. allen west who are hardcore tea party, andine though they opposed the boehner deal gave him the yes vote he needed to get back in the negotiating
ring. they are willing to be pragmatic to get it better for themselves. >> again, we don't know, if we don't know if it will come together yet. there is a lot of folks to be counted in the senate and house. you wrote many times that washington is the big loser. everybody is saying what is going on up there? but as far as others, besides this place, anyone stand out? >> believers in stimulus. believers in demand side economics. the columnist from the new york times, they took a bad beating in all of this because the president walked away from it. this guy talked about winning the future with big investment and now members of the democrat caucus pointed out, he was the one who talked about cutting social security to get a grand bargain. their vision has been
repudiated by the president. >> thank you so much, chris. you can hear more from chris on fox power play starts at len-- 11:30 eastern. what is the latest dismal numbers and what do they mean for the economy and are we going the wrong way in iraq? no.s with a hat. you see, airline credit cards promise flights for 25,00miles, but... [ man ] there's never any seats for ,000 miles. frustrating, isn't it? but that won't happen with the capital one venture card. you can book any airline anytime. hey, i just said that. after all, isn't traveling hard enough? ow. [ male announcer ] to get the flights you want, sign up for a venture card at what's in your wallet? uh, it's okay. i've played a pilot before. you have arrived. sweet belt.
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residents in syria said security forces killed 70 people today. the worst carnage was in a opposition stronghold. army troops sealed off the main roads in and out and today tanks pushed in for four
sides before daybreak. it is believed that the government is trying to crack down on protest ahead of the muslim holy month of ramadan. president obama wrote that he is appalled by the violence. libya group said they have imposters that were infiltrating the ranks and freed loyalist from prison. they engaged in treat battles on the outskirts. lawyers for two american hikers held in iran for two years said they will learn their fates within a week. the trials of josh fattal and shane bower hope if they are found guilty they would only be sentence to time serve released. >> the war in iraq is increasing.
steve has the details. >> contractors bilking the u.s. government and the government is misleading the u.s. people according to the general for iraq reconstruction. they singled a dubai-based contractor with an office in the dc area. he charged $900 for a control switch worth 7.05 . a 4500 dollars for a $183 circuit breaker . overbilling 4.4 million. >> you are in the middle of the war wrone and procedures are short circuited in order to deliver the product. that is not excusing it and that's why the congress set up the inspector general's office. >> he denied it all. telling fox news. these conclusions are false
without legal and factial justification. everything was approved by the u.s. government. he said it is a summer of uncertainty in iraq months ahead of a u.s. planned pull out. there is a death of 15 american soldiers in june as evidence that things are not as rosy in iraq as u.s. officials are leading. the contract abuses can affect the american troops that might stay in iraq and how long. in washington, fox news. >> a shoe side bomber hit in southern afghanistan today. 11 people were kill would including a child it is the latest violence in a surge of attacks in an area where afghans are taking security controls .
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>> and now political grapevine. washington might want to consider getting a loan from apple as congress and the white house discuss a debt ceiling compromise.
they have more cash on hand than uncle sam. the company had 76 billion in cash . marketable securities and compare that to wednesday's daily treasury statement. the government's total operating balance was 74 billion and a hefty sum and billed less than apple. it was down to 53 billion. nasa's satellite data appears to be blowing a hole in global warming and releasing more heat in space than computer models predicted. that is by a new study and environmental police expert - policy expert said the nasa data show a huge discrepancy between the alarmist climate models and real world facts.
the man who confessed to carrying out the deadly attacks in norway could end up in a swanky prison that looks luke a plush hotel. the second largest and most secure policy was created to avoid a institutional feel. it is spread over 75 acres and features wooded jogging trails and private rooms and insituatebaths and many refrigerators and flat screen tvs and boast a large state of the art gym with climbing wall and personal trainers and a professional recording studio. our top story in the bottom of the hour, a deal is reported to be close in the stand off over raising the borrowing limit. republican leaders are talking
to vice-president biding and leading democrats . the outline is believed to provide the debt ceiling increase of 2.4 trillion with an equal number of spending cuts. when it is settled there are many long-term problems with the u.s. economy. jim angle looks at disappointing signs. >> they explain the slowing economy by pointing in part to the debt ceiling. >> when we allow the uncertainty on whether our country will go into default, that is a self inflicted wound. >> it is clear consumer confidence and we have to remove the cloud. >> it doesn't explain growth is declining. it was revised sharply downward from a report of 9 percent to.4 percent .
growth in the second quarter was.3 percent. they have denied it has to do with the president's policy. >> we have had head winds that hurt the economy. higher oil prices and supply chain disruptions from a historic earthquake in japan. >> the stimulus didn't create the shovel ready process . they pointed to 9.2 percent unemployment. >> whether it is houng starts and the deficit, and whether it will be unemployed and whatever it is. it has gotten worse since the stimulus package was passed rather than better. >> private sector economist blame the heavy hand of washington. the chamber of commerce chief economist said in a statement it is clear that the policiless of the administration that increased regulatory burdens and raised the uncertainty of small
businesses made it difficult for the economy to grow and have jobs . >> it is uncertain and higher every year. it makes you more reluctant to hire people. it makes you more reluctant to invest and expand your business. >> polls show confidence at a low . the president's approval rating is suffering along with it . suffering to a new low of 40 percent. >> one thing is clear. even if the debt ceiling dispute gets resolved. the debate is getting more and more pointed as growth slows to a crawl, bret. >> thank you, jim. >> we'll talk about the developments when an expanded edition of the all-stars. join me after the break.
>> to avoid default and avoid raises taxes . begin to get the federal government's house in order. >> after speaking with mitch mcconnel this morning, we are cautiously optmistic. >> that is a lot of optimism on capitol hill today and late in the day there was pessimism and kind of in limbo right
now. this is where we see the deal as it stands rights now. the details, raise the debt ceiling 2.4 trillion through 20.14 . a joint committee of lawmakers recommend 1.4 trillion to match the remaining increase. they will happen before thanksgiving recess. if the cuts are not approved by the recess in december. automatic cuts take affect. what those are, are key and a vote, promised vote on a balanced budget amendment. the second to last item about if they are not approved is called the trigger and penalty and punishment if the committee can't get it done. that is the focus for the last week or so and focus for late this afternoon . it could be breaking news depending on vote counting in the house and senate. we'll bring in our special
epanded panel. david drucker reporter for roll call and syndicated columnist. what are you hearing in >> well, there is final discussions between the house republicans and therefore, the senate republicans in the white house and it is not a deal that the speaker is taking to the members . that got cancelled and never materialized. they are down to details that they are still haggling over and don't want to discuss. too many numbers and get food thrown at them until they have it in hand. we are still looking at maybe something that will gel tonight. it remains fluid. but i think they want to move very quickly to get to a vote. >> you think they will vote tonight? >> senator reid said it is possible they will vote in the senate. everyone i speak to said it is doubtful. the house vote wants to do it
as soon as the senate votes. >> the concern over the defense cuts. tide to the trigger if the committee doesn't get done with the work. they are significant and half of these cuts, this is what senator leiberman said about it. this is his communication's director. he is concerned about rumor that is the debt agreement negotiated was disporportionately cut and unacceptable high risk for our national security. leiberman is an independent and national security, and there are many in the house with concerns. >> many have concerns about that. i spoke to a hawkish house republican aide who said if you have the kind of defense cuts that are contemplated in the first wave of cuts. >> one trillion, and as part of the trigger, you could see dozens and dozence was house republicans bailing out of fear that this would in affect
cut defense if not in the first, the second . that is the concern here, president obama in his budget, call it budget situation. it was not a budget plan wanted $400 billion over 10 years. you are talking about in the second, upwards of $500 plus billion . these are greater than what president obama requested. people who are for the compromise, and for the deal will say it is highly, highly unlikely we'll get there. you are talking about things that are so unlikely to happen for people to vote against the deal would be unwise . >> it start to bubble up this afternoon . we went back to a hearing on tuesday when senator mccain a question along these lines and listen to this. >> in our view, what would 800 to trillion dollar cut in
defense spending over the next 10 years do to our readiness, general? >> i haven't been asked to look at that number. we were to look at 400: based on the difficulty of 400 cut 800, would be extraordinary difficult and high risk. >> that is the man to be the chairman of the next joint chiefs. >> it is a tough number for the hawks to swallow. >> correct, as steve mentioned, it is it tough for the house republicans who care about defense in addition to senate republicans and the real thing here, counting votes in the house. we saw how tough it was for boehner to get to boehner 3.0 and they will have to do something that is little less than and a compromise with the senate democrats and president . so if you take away the republicans that care about the issues, you have to put
together votes in a different way and what boehner doesn't want to do in my view is run it in the house and depending on democratic votes. we don't know where they are going to fall out because of the progresses and liberals. >> on that front, the progressive caucus. 70 house members, in the senate, announced this caucus is opposing the new deal because of no tax increases. house minority leader charles said this about the deal . >> we will have to take a look and we may not be able to support it or none of us will support it. we are open to what comes down and the stakes are high . >> and some of us might not or none of us might support this bill. >> if it is none, let the house democrats oppose the
deal and have default on their head because that would be the result and i think it would be ragger difficult for the president who happens to be a democrat to explain that. look if you are a republican, you have to look at long gain and long view. this is a tremendous success. the president in january is talking about more spending on invasion and energy and all of the pet stuff he believes in and here we are nine months later, it sounds out of the jure assic area and we are now in the debt era. the stimulus in opposition to the huge expansion of government and debt and what we are talking about today . the we are now in the debt era and central to all political debates. they have a trillion of cuts today .
i am unhappy about the defense cuts and look. you cannot govern out of one house if begin the terrible economic numbers that came out on friday, the president has to defend this economy he loses. the republicans would have to run the worst campaign in history and not win. but the control of the senate and houses make the changes you want. >> what is happening for people sitting at home? what are they doing. a bed check and saying, who is voting for what? what is going on in the senate right now? >> what is going on. get the final details of the deal and they have to work out with the white house. senate majority leader harry reed is agreed to it and out of the discussion. defense cuts are a huge point of contention. i think what you are going to see is that everyone has to
huddle with everyone. progressives heard enough to bail and tea party republicans heard enough to bail. but you will see over the next few days as charles said accepted consensus with the republican conference that this was a win and the principles they laid out. two step process and no taxs and spending cuts is a huge win. democrats will struggle. 141 against the 80 democrats in the house it is a tough vote for democrats because there is no revenue increases and there is nothing on the table that they fought for except for the defense cuts which is part of a trig are if the committee fails to act. >> we'll take more prediction and talk about the politics when we get back. who do you think is the biggest winner in the debt
ceiling extension. we don't have the final vote yet. you can vote on fox report. results after the break. we get it done. turn left. you have arrived. sweet belt. e-reader for textbooks. gps. video camera for lectures. game pad. have you considered this ? it's got all tha and more than 200,000 apps.
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>> you cannot be the leader of the free world and sit on the sidelines and tweet and think you'll get the job done. we've been out front, negotiating, talking, but we've laid out a clear set of principles that we'll bring accountability back. >> we need to finish that job, the way to finish the job have a balanced debt reduction package that doesn't hurt the economy. >> who do you think is the biggest winner in a debt extension going? congressional republicans with
56%, followed by no one, with 33%. we thought no one might win. we're talking about the politics, we're back with the panel. david, what about how this shapes up for the president and how this is going to play out politically after whatever happens over the next day and a half? >> so if we can get out of here august 2nd with a deal and don't default and don't have a crisis, i think the president scores a victory of sorts because the economy and unemployment rate are bad enough and allowing this to go forward and create another crisis is a big problem for his reelection. however, it's not a usama bin laden type of a victory, with a deal that reflected well on his leadership and you saw a nice big poll bump. we get back to the argument over the jobs and economy. the i think the speaker ultimately did a decent job at least to this point in time of holding his caucus together while getting somewhere towards a compromise and i think even senator mcconnell
and senator reid come out of this in terms of deal makers and it's really interesting the roles they played with vice-president biden in helping us at least get to the point we are today. >> you give everybody a cookie. >> i give everybody a cookie. >> i mean, this is the future that you always wanted. >> well, yeah, but remember, because they're all playing to different constituencies, this is not boehner versus obama and only have only one can win. the president is playing to a national constituency and has a reelection issue. the speaker had its first real test as a leader of a new and exuberant sort of conference. could he get it together and reid had to come in and play cleanup and could they work together to get us across the finish line. >> that's yet to be seen. steve, if speaker boehner comes with what comes from the senate, and he has to pass with more democrats and republicans. at the politically wounded in
his caucus? >> yeah, that would be a huge problem with speaker boehner. >> is it a possibility? >> i'm not sure. the a lot depends on what we hear about the level of defense cuts in this first wave the cuts that's apparently still being hammered out. if it's such that you have people, like the 40-plus people on the republicans on the house armed services committee and others who are hawks who bail on the speaker, you know, there's a real question taos whether he could at that point get the majority of his own caucus. there's talk today that maybe that's not possible and you have this cobbling together of-- >> and even up against the tuesday deadline where the economy is in-- >> i think there were many house republicans, including people in the 218 that voted to pass the boehner plan who are not happy about having to cast that vote. there remains deep suspicion about this bill and the policy in this bill generally and beyond that. you go back to the the 2010 elections and if tea partiers
have won on substance and talking about things that the 2010 election suggested we would be, and lost entirely on profits, this is what the 2010 election was supposed to avoid and here we are less than 48 hours before this is going to be decided. nobody knows what's in the final bill and people are passing it it's more complicated than enron accounting. >> and our constitutional system is designed so you can't govern controlling half a branch of the government. it's simply not that. i think the president, if this is avoided, he doesn't gain, he doesn't lose, he didn't show any leadership, it will be neutral. boehner, i think if he gets 60% of his caucus, he'll be okay. the winner is the tea party. they have changed the debate in the country and i think they ought to do what george aiken advocated in the worst days of the vietnam war, declare victory and go home. there'll be another fight, a year from now. obama is losing it, and i
think that's where the big payoff will be and that's when the country will decide what everyone wants to do about debt and about the size of government. >> ab. >> we're not going to have to wait another year for another big fight and we maybe averted default, but the american people have to get used to government on the brink. we have appropriations saddle in september. expires on september 30th that will be a massive brawl. more short-term stop-gap measures, lots of talk about sending the government down midnight oil burning and shouti shouting. >> i asked senator mcconnell about this on fox news sunday, does the republican parties risk being the party that's going up against the cliff? and he said sometimes it takes going up against the cliff to get the shift to move, essentially is what he said. >> i think everyone can look forward to that in the beginning of the fall as we move into the super committee trying to come up with bipartisan entitlement reform
which has never happened in in town with the things we've come and go with great frequency, we're going to be close to shutdown from now on. >> that's the purpose of this trigger in theory, and this punishment, if this committee can't get it done that the circumstances are so dire for both parties, hey, you know what? we've got to get this one done. >> let's see if that turns out to truly be a balanced trigger unless they have a deal that shapes up on this question, the speaker from my reporting, he has really strengthened his hand and shown the people, even that can't vote with him. he's been honest throughout the negotiations and what he says to them behind closed doors is what he's doing with the other negotiators behind closed doors when they're not there and they trust him and he probably pulls out, in the leadership population, at least 100 votes and then another 40 people and they want to avert default and i think he's going to get more democrats than republicans. >> let's play out, let's say
the senate passes with 75-25. the house, what's your number? >> down the road? >> i honest rly have a no idea. a the lot of it depends details we don't know yet. it passes and it squeaks through. >> that's called a cop-out. >> he by the way got me off the hook. >> i'm 0 for 2. >> no, that's the winners and losers. i think if you've got a strong bipartisan majority in the senate sends a message to the house first of all, there's a lot of republican and democratic support for this and a lot of republicans in the house we say we can't do this again, there's no appetite and we won't bury by continuing to fight. >> number. >> in the house, 141-50 republicans. >> 140-80? >> 140-80, an error-- >> passes with 235 votes.
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>> finally tonight. we said the wall street editorial. and hobbits, and senator john mccain read that on the senate floor, well, there may be more to the whole story. >> i get comparing the debt crisis to the lord of the rings. they'veh